As the Securities and Exchange Commission contemplates reforms to strengthen the transparency and resiliency of money market funds, ABA urged the commission to “carefully consider any changes that may affect the availability of these funds to bank fiduciary and non-fiduciary accounts.”
The Securities and Exchange Commission today proposed new amendments intended to help improve the resilience and transparency of money market funds, following significant volatility seen in the early days of the COVID-19 crisis.
In a lengthy farewell speech today as his tenure on the Federal Reserve Board of Governors comes to a close, former Vice Chairman for Supervision Randal Quarles outlined several “further refinements to the bank supervisor and regulatory framework” that still need to be made in the near term, including further calibration of leverage capital standards.
The Financial Stability Board today put forth several policy proposals aimed at increasing the resilience of money market funds, which experienced extreme volatility in the early days of the COVID-19 pandemic.
As part of its ongoing work on non-bank financial intermediation and following significant volatility in short-term funding markets early in the pandemic, the Financial Stability Board is seeking comments on various policy proposals aimed at enhancing the resilience of money market funds.
In a comment letter today, ABA told the Securities and Exchange Commission that any reform of money market funds should not focus on regulated banks, which have been a source of strength during the pandemic.
Following significant liquidity strains—particularly among money market mutual funds—at the outset of the COVID-19 pandemic last March, the Financial Stability Board will publish a report in July outlining “consequential policy proposals” to improve MMF resilience.
In remarks at a virtual industry event today, Fed Governor Lael Brainard commented on the strong performance of the banking sector during the COVID-19 pandemic, emphasizing that strong capital and liquidity positions will continue to be important as banks continue to face a high degree of uncertainty.
The nation’s banks “remain resilient” amid ongoing pressures brought on by the pandemic, the Federal Reserve said today in its semiannual monetary policy report. The Fed noted that bank profitability and capital positions improved in the second half of 2020, citing lower-than-expected losses and an improved economic outlook, among other things.
The Securities and Exchange Commission is seeking feedback on potential ways to improve the resilience of money market funds in the face of economic instability.